BREAKING THE BoP BARRIER: Challenges faced by entrepreneurs targeting BoP markets for profit in India

With increasing social problems like climate change poverty, population increase, pollution, etc. entrepreneurs have a plethora of opportunities and an open and diverse market to work on.  At some time in the future, the world might reach a stage where all business will have to converge towards making a social impact. While it has become important to come up with breakthrough innovations to tackle the problems faced by BoP markets, it is surprising to note that many great ideas and innovations in India have failed to make an impact. Social entrepreneurs are facing challenges to make people buy their product or use their services. What could be the reasons behind this?

Let us see this by analyzing the possible bottlenecks.

Consider the example of cookstove by 'Envirofit International'  which aims to provide efficient food processors to reduce Indoor Air Pollution (IAP) and provide health benefits to end users. The venture has a great leadership, a well-set plan, and well-learned engineers. They have spread awareness to a large audience in south India through a variety of distribution channels. However, even if people become aware, the product cost overshadows their preferences. It takes great research and money to come up with a breakthrough product. Hence, it does not become viable for the producer to sell products at lower marginal cost.

In a culturally diverse country like India, various emotional, cultural and linguistic constraints affect the feasibility, desirability and viability of a product. It is difficult to create a one-size-fits-all product. Great innovators can take care of the feasibility and viability aspects. However, the most important factor to consider in India is desirability. A person may have lots of money but if he/she does not desire to buy, he/she will not buy the product. Now, once he gets the desire, it is just a matter of breaking the economic barrier to use the product. The reason why I used the word "just" is that money is the only aspect that is measurable in the Triple-Bottom Line approach.

The best strategy to break the economic constraint is by providing microfinance loans. (Mohammad Yunus approach) -  and give women the central focus while implementing a strategy to ensure reliability of the model. This model will take care of both the feasibility and desirability aspects.

Now, a majority section of people in rural India will not value a product until it becomes a necessity. Therefore, it is important to disrupt the on-going chain of the old cooking techniques by creating an impact. High number of IAP related deaths creates a concrete case to bring about an impactful change.

This requires an efficient distribution channel. There must be a strong link between producers and end demand. People in rural India require the product to be marketed by a source that already has an established credibility.  Partnership with Government will help bridge the gap, because a product marketed by Government will create a sense of trust among people to buy the product.